Should You Buy Carbon Offsets?

By Anja Kollmuss, G01, Stockholm Environment Institute

Carbon offsets are becoming a popular way for individuals to lower greenhouse gas emissions. They’re based on a simple principle: you pay someone to reduce emissions in your stead. Offsets include technologies such as renewable energy and energy efficiency, as well as projects like tree planting that absorb greenhouse gases.

Offsets alone, however, will not get us to the drastically reduced emission levels that are necessary to prevent catastrophic climate change. That will require a sharp move away from fossil fuel, significant improvements in energy efficiency, and major changes in lifestyles.

Yes, offsets have a place in helping us transition to a lower-carbon economy, but other measures should take priority. The most important thing is to be politically active and support officials who are pushing for far-reaching climate protection legislation. After that comes reducing your own emissions: find out where your biggest emissions come from (a number of carbon calculators are available online) and adjust your personal habits accordingly. Then buy high-quality offsets for the emissions you cannot avoid.

The voluntary-offset market is young and unregulated. If you do decide to buy offsets, ask the company that provides them a simple question: Would the offset project have happened even if the company could not sell carbon offsets? If a project is going to happen anyway, buyers of its offsets can’t really claim that they are offsetting their emissions. This concept, called “additionality,” is the most debated topic in the carbon offset world.

There are several possible tests of additionality. For example, the regulatory test asks: Is there a law requiring the project, such as legislation to capture methane at a landfill? If so, the project is non-additional. The regulatory test is easily applied, and all reputable offset companies require it.

Yet to exclude only projects that are mandated by law is a very weak standard, because projects happen for many other reasons, too. Wind farms in the United States, for example, are often built because federal tax credits make them financially viable. For that reason, do not purchase offsets that originated as Renewable Energy Credits (RECs or “Green Tags”), because those are usually not tested for additionality. And here’s a rule of thumb: if offsets are very cheap—five dollars or less per ton—they are more likely to be from non-additional projects.

Finally, look for Gold Standard certified offsets. This standard, developed by several environmental organizations, is one of the most stringent available.